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HMRC internal manual

Compliance Handbook

Charging penalties: establishing penalty behaviour: recording evidence

All decisions to charge a penalty must be backed up by evidence. NPPS should be used to record evidence for penalty decisions, see CH407050 and CH407100. In cases where a penalty is not agreed, you and the authorising officer must be confident that the Courts would agree that the penalty is payable.

In disputed cases, evidence of questions you asked the person and their responses, or lack of them, will be vital. You will be required to produce a record of anything said by the person that you use to support your decision on penalty behaviour. Therefore, you must keep a detailed record of any discussions.

Your record of questions and answers may be challenged during a dispute about a penalty, especially if we are alleging that the behaviour was deliberate or deliberate and concealed. The person may deny what they previously told you. It is good practice to produce meeting notes during or shortly after a meeting or discussion during a visit, in order to confirm what the person said. You should invite the person to confirm in writing that they agree the notes are a true and accurate record. Any disagreements should be noted as soon as possible. If the person refuses to agree the notes, you may need to obtain further evidence of the penalty behaviour, possibly by using information powers.

You will also need to keep a record of documentary evidence to support your conclusions on penalty behaviour.